The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
Curiosity got the best of me recently. I wanted to know just how well I had done with credit card rewards in the past year. My basic credit card rewards strategy is simple, essentially consisting of only two cards for the joint family expenses.
The first is the Citi Cash Back card which pays 2%. I have adjusted that slightly in the short term, but I’ll explain that later. The second is the BJ’s MasterCard which pays 3% back at BJ’s and gives 10¢ back per gallon of gas.
That is all we use for the household expenses, but it isn’t the only place I was able to rack up my rewards last year. Both the wife and I have our own credit cards for our personal spending that also offer rewards. I then opened up another card to take advantage of a quick cash back offer. In total for 2016, I was able to receive over $1,200 back. I’ll detail what I was able to get from each of the cards.
Citi Cash Back
Our everyday card receives the overwhelming majority of our purchases. We generally use it for all of our joint purchases, with the exception of our BJ’s credit card. If I can put the purchase on a credit card, it goes on the Citi card. In total for 2016, we earned about $660 in cash back rewards. I choose to take this as a direct deposit right into my checking account. They do offer various other ways to receive the money, but my preference has always been the direct deposit. We had previously used the Bank of America 1-2-3 card and averaged somewhere between 1.3% and 1.4%. So, with the Citi Cash Back card we are earning more.
Since we spend a few hundred dollars here a month, we end with a nice reward total at the end of the year. For last year, we earned $220. That doesn’t count the 10¢ back per gallon of gas that we also receive. If I had to guess the value on that, I would say that would add an additional $50 a year. The rewards are only redeemable in store, so I just take the reduction at the register when I have earned a $20 reward.
Bank of America
The rewards in this bucket are actually from two different cards. One is in my wife’s name; the other is in my name. My wife uses this card for all of her personal spending. The card is called Better Balance Rewards. It is fairly simple, pay more than the minimum amount due every month and they will pay you $25 every quarter. If you have a Bank of America checking account, the reward is $30. Since my wife pays her bill in full every month, she earns $120 for the year. I opened up a card in my name and put a recurring monthly charge on it. My wife’s gym YMCA membership is what goes on that card every month. I made sure that it would be more than the minimum payment and that we also would pay in full every month. I have the reward deposited into my wife’s Bank of America checking account, thus earning $30 per quarter or $120 for the year.
Discover It Card
This is my personal card for any of my expenses. It earns a flat 1.5% cash back with rotating quarterly bonus cash back up to 5%. Since I do not spend a lot of money, I earned about $62 last year. I am not very disciplined about maximizing the 5% categories. I am sure I could squeeze a little more money out of them; I just don’t feel like dealing with the extra work.
This is one that I actually did charge anything to in 2016. I simply opened up the card in December as they were offering $70 cash back bonus if you opened the card. I did and received a quick credit on Amazon which I applied to my Christmas shopping. I haven’t decided yet whether I will use this for any other Amazon purchases. I’m not sure again if I want to deal with the extra work of managing a different card.
Nice Extra Cash
All in all, I was pretty happy with what we earned with all of our cards in 2016. Since I like the convenience of credit cards, I was going to be using them anyway and paying them in full every month. This way, I get paid to use them. Which cards do you use?